Bunge seeks answers to NMB Bank’s CEO puzzle

Monday January 20 2020
NMB PIC

The NMB Bank Plc board chairman, Prof Joseph Semboja, speaks during a meeting with the Parliament’s Public Investment Committee at the weekend. Left is the bank’s acting chief executive officer, Ms Ruth Zaipuna. PHOTO|THE CITIZEN CORRESPONDENT

Dodoma. The Union Parliament wants the NMB Bank’s board of directors to expedite the hiring of a new chief executive officer (CEO) and managing director of the bank. This comes about one year after the tenure of the immediate past CEO and managing director, Ms Ineke Bussemaker from The Netherlands expired.

NMB Bank Plc is Tanzania’s most profitable bank.

Ms Bussemaker – who is credited with maintaining NMB’s profitability record, and for developing a successful digital strategy, as well as contributing to Tanzania’s financial inclusion endeavours – left the country after four years to assume a new role at the Rabobank of Netherlands in December 2018. Since then, the NMB board has not announced a new CEO for the bank, raising the question whether it has a clear succession strategy and continuity plans in place as and when Ms Bussemaker left.

Should the advice by the Parliamentary Public Investments Committee (PIC) be adopted, this would be the first time that a Tanzanian is appointed to the helm in the wheelhouse of what had become the most profitable bank in the country after it was privatized in 2005.

“We know that the position of the managing director may require some processes. But, it is this committee’s view that we do not necessarily need an expatriate to fill that position when we have a lot of competent Tanzanians. We will advise the government on this accordingly. We want to see what happens when the bank operates under a Tanzanian CEO,” the PIC chairman, Mr Raphael Chegeni, said in the nation’s capital Dodoma at the weekend.

To become a CEO for a commercial bank, must – among other criteria – obtain prior approval of the central Bank of Tanzania (BoT).

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Mr Chegeni was speaking during a meeting of his committee and the current NMB Bank management and the bank’s board chairman, Prof Joseph Semboja.

The government has a 31.8 per cent stake in the bank, while Rabobank of The Netherlands boasts a 34.9 per cent stake. Individual investors who have bought shares through the Dar es Salaam Stock Exchange (DSE) own 13.8 per cent of the shares, while the rest of the shares are held by an assortment of investors. Since its privatization in 2005, NMB Bank Plc has had three managing directors, all from The Netherlands. The first one was Ben Christianse who was succeeded by Mark Wiessing. The latter – whose term ended in February 2015 – was succeeded by Ms Bussemaker.

Figures presented at the meeting by the bank’s acting managing director, Ms Ruth Zaipuna, showed that, in the following successive years, the bank registered net profits (as shown in brackets): 2014 (Sh156 billion); 2015 (Sh150 billion); 2016 (Sh154 billion); 2017 (Sh93 billion), and 2018 (Sh98 billion).

Expounding on the bank’s performance during the past few years, Ms Zaipuna said the government had received a total of Sh119 billion in dividends from the bank since 2008. On the other hand, the total amount paid in various taxes rose from Sh97 billion in 2015 to Sh122 billion in 2016; Sh144.4 billion in 2017, and Sh1687 billion in 2018.

In the event, Mr Chegeni durected Prof Semboja to confirm into their operating positions all the bank’s senior officials who have been working in an acting capacity for overly long. “When someone works in an acting capacity, he/she cannot make long-term decisions. This committee directs you – and we know that it is within your means to do so – to ensure that those working in acting positions are confirmed,” said Mr Chegeni.

Apart from Ms Zaipuna, other members of the bank’s management team who are currently working in acting capacities (with their positions shown in brackets) include: Mr Aziz Chacha (acting Chief of Wholesale Banking); Emmanuel Akonaay (acting Chief of Human Resource); Mr Benedicto Baragomwa (acting Chief Financial Officer), and Mr Demetus Kamgisha (acting Chief Credit Officer). The Parliament, Mr Chegeni insisted, wants the bank to maintain its tempo of investing in community projects.